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Greek govt in Rome for talks on bailout

Rome - Leaders of Greece's new leftist government were due in Rome on Tuesday, as they continued a tour of European capitals to press their demands for debt relief.

Prime Minister Alexis Tsipras and finance minister Yanis Varoufakis were set to hold separate talks with their Italian counterparts, Matteo Renzi and Pier Carlo Padoan.

On the eve of the meetings, Varoufakis gave an interview to the Financial Times in which he said Greece was not looking for downright debt cancellation, but proposed a "debt swap" that could be more palatable to the country's creditors.

READ: Greece cannot pitch France against Germany

A key feature of the plan is that Greece's repayments to eurozone partners should be linked to economic performance: The more the country lift itself out of recession, the more it should honour its debts.

Varoufakis called it "smart debt engineering," and insisted that Greece's current bailout deals were "unenforceable" and needed "to be rethought from scratch."

"Help us reform our country and give us some fiscal space to do this, otherwise we shall continue to suffocate and before a deformed rather than a reformed Greece," he said in his interview.

Tsipras' Syriza party was elected after pledging to reverse many of the austerity cuts imposed on Greece in return for bailout loans.

Greece argues that this approach will spur growth. Germany, the country's chief creditor, has rejected the idea of whole-sale changes to the debt deal.

Varofakis visited Paris on Sunday and London on Monday. On Wednesday, Tsipras was due in Brussels. Greece's new leader has so far not planned any visit in Berlin to German Chancellor Angela Merkel.

Greece was the first eurozone country to be rescued from bankruptcy by bailout loans, in 2010. Its public debt stands at around 175% of gross domestic product, and it has suffered a record recession that has seen the economy shrink by 25% since 2009.

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